Shurgard Lok'nStore and Two Smoking Barrels

At the FY23 presentation Shurgard explained that FY24 would be more about acquisitions. They soon came out with guns blazing. The 300m capital increase of last year provided ample munition (LTV 13%) for “add-on” acquisitions. The German Pickens acquisition was a first strike (120m), but the Lok'nstore deal ups the ante significantly (613m incl. 83m pipeline). This last deal changes our perception of the company from a gentle consolidator and developer to an integrator for the next 12-18 months. Total FY24 Capex is now expected to top 1bn EUR. We remain convinced about a significant upside potential and management execution capacity, but reduce our target price from 58.0 to 54.0 to reflect the integration disruption. The market has become wary for a new capital increase, but we believe that the company can wait or use a share deal (contribution in kind) for future consolidation.